Is there a good time to sell your company and how to do it?
Is there a good time to sell your company and how to do it, international business transfer
Is there a better time to sell a company, an ideal time, and how does a transfer take place? Strictly speaking, there is no bad moment. But if there was one thing to remember, it would be that you should never sell in a situation of failure or difficulty (loss of a contract, loss of a market, consequences of an audit…).
Don’t wait until you retire, always anticipate and take advantage of the time you have left before you decide to sell, to organize the business if necessary; in other words, make the bride even more beautiful. It is always preferable to show potential buyers that you have thought about the different ways to develop the business, to give the business perspectives. This will help, reassure the buyer, but also confirm the value you have given to the business.
How does a transfer take place, what are the different steps to follow?
It is best to meet with a consultant who knows your market and your industry.
The first question you should ask yourself is: What is the “value” of my business? As often explained, profitability remains the basic criterion for calculating the value of the company. But there are many other methods that allow, depending on the sector, the nature of the activity and the specific characteristics of the company, to refine its valuation.
Once you have agreed on the selling price based, of course, on the value of the business, it is essential to build the presentation file. The presentation file is the first document that a potential buyer will receive following his request. It must be as complete as possible, it must be able to answer 80/85% of the questions that the future buyer has. The file must cover the history, the activity, the market, the legal structure, the shareholding, the organization, the analysis of the balance sheets and profit and loss accounts, the communication, the development axes…… the file must allow the potential buyer to know if this file deserves that he/she takes an interest in it, hence the importance of the quality of this document.
Your council will proceed to the “communication” of this file. Either it has already identified potential buyers to whom it will offer this file as a priority, or it communicates through the various marketplaces. It is up to your board to meet the potential buyers, to validate their interest, their financial package, in other words, the seriousness of their application. As for you, for the moment you continue to run your business.
Once this stage is over, you meet the selected candidates in the presence of your consultant and the first interviews begin. We don’t talk about price, but we validate each other’s interests, one to sell and the other to buy.
Then comes the time of negotiation, which should not be a time of conflict, but which is often an occasion of stress for the protagonists. A good deal is not made to the detriment of one or the other of the parties. We must place ourselves in a win-win strategy.
Once the financial package is in place, the legal experts intervene in order to set up the memorandum of understanding and the asset-liability guarantee (ALM).
With these steps finalized, the final transfer document can be signed. This will usually take between 8 and 14 months.
Olivier Renard
Actoria France
www.actoria.com
